Shanghai blues

When the Shanghai stock index stumbled late last month, markets from Tokyo to London echoed the shock, with the New York Stock Exchange registering the single worst trading day since September 2001, when the market reopened after the terrorist attacks on the World Trade Center. The rolling implications of the 9 percent slump in Chinese stocks startled brokers and pundits worldwide with the global reach of the Asian market-and the realization that when Shanghai sneezes, the rest of the world catches cold.

So while Beijing primps and prepares for its 2008 Olympics debut, Shanghai has increasingly emerged as the cosmopolitan and financial nerve center of East Asia. The breathless pace of urbanization appears in the futuristic Shanghai skyline, which now contains more skyscrapers than New York City itself, and in the construction along Ding Xi Lu, a typical Shanghai street where new rows of glass storefronts materialize in a weekend.

Fueling the pace of overnight modernization, however, is a migrant labor force that facilitates urban growth while remaining marginalized from its benefits.

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Meet Mr. Ma, a self-employed phone card salesman from nearby Jiangsu Province, who sets up shop along Ding Xi Lu, one block from the brand new glass storefronts. Today he opens a folding chair in front of the Taiwanese pancake restaurant-breakfast while you wait-and props up a small table to display stacks of prepaid phone cards sheathed in colorful paper packets. When a customer approaches, defunct cell phone in hand, Mr. Ma rips open a 100 kuai packet with his teeth, deftly scraping away the security strip and punching the new set of numbers. He dials and listens intently before grinning and handing back the now functional phone.

Mr. Ma is a migrant worker, one of approximately 150 million Chinese citizens who move from rural to urban areas, often illegally, in pursuit of a better life. According to Wang Guixin, director of the Institute for Population Research at Fudan University, some 5.8 million of Shanghai's 18 million residents-nearly one-third of the city-are considered migrants.

Lured by the siren of urban prosperity, Mr. Ma left his family and moved to Shanghai in 1980. For years, he worked odd jobs without seeking permanent employment. In the late 1990s, when cellular phones became popular, Mr. Ma began selling phone cards from his makeshift booth on Ding Xi Lu.

When asked about life as a migrant worker, Mr. Ma replies with a shrug, "It isn't all that bad."

In many ways, his is a success story. Ten years ago his wife and children moved to Shanghai to join him. Mr. Ma has since developed a faithful clientele, carving a new life in a big city for himself and his family. But after a moment to ponder, Mr. Ma does confess-even after more than 25 years of living in Shanghai, he still considers Jiangsu home.

When record Chinese growth rates increased the demand for cheap urban labor throughout the 1990s, migrants flooded the cities in response, creating an ongoing system of internal Chinese migration. China's three largest cities-Beijing, Shanghai, and Guangzhou-remain the top three destinations.

In an urban culture obsessed with perfectly pale skin-to the point that makeup products often contain whitening agents-the darker complexion of the migrant workers makes the floating population of Shanghai, which is ethnically similar, appear distinct.

Many Shanghai migrants work on the streets, toting wheelbarrows of fresh fruit, selling steamed buns from a corner booth, or peddling phone cards. Others work in construction, serve as live-in maids or aiyis ("aunties"), or end up as prostitutes in brothels thinly masked as massage parlors.

Upon arrival in Shanghai, most migrants congregate in urban slums, or cuns, made up of dilapidated or illegal housing developments. One such neighborhood in western Shanghai is located at a sewage drop-off point along Suzhou Creek where the flavor of waste permeates the air. Two-story houses of crumbling concrete line the streets, the labyrinth of narrow alleys decked with lines of colorful laundry.

But what separates the plight of the Chinese migrant from the life of an impoverished worker in any developing country is the hukou system of household registration, which officially classifies and binds Chinese citizens to their birthplace. First instituted by Mao Zedong in 1958, the hukou was designed to control the population and collectivize the countryside according to the grand Maoist vision of Chinese communism.

In practice, the hereditary hukou label created a permanent rural underclass, because the command economy before the 1980s required a residency permit for access to food or employment. With the advent of market reform, the hukou system loosened as well, allowing the first wave of migrant workers like Mr. Ma the opportunity to seek jobs in the big city.

But post-socialist transition has yet to erase the double standard of rural/urban citizenship in China. Without official urban residency, Shanghai migrant workers are typically denied access to education and health care in the cities where they live and work.

One migrant worker, Xiao Wang, serves as an aiyi for a Shanghai family and sends her salary home to her husband and two young sons in rural Henan province each month. She moved to Shanghai in 2005, following the path of her older sister to an unregistered maid agency that links families with migrants. But because she holds a rural hukou, Xiao Wang's options for medical care in Shanghai are slim. Asked what she would do if she got sick, she replied that her only option would be to return home for treatment.

Education for migrant children is an equally controversial topic, since migrant families are often charged discriminatory tuition at urban schools-a practice that is officially prohibited. A 2006 study published in the Pacific Economic Review suggests that only 20 percent to 30 percent of migrant children attend local schools.

Ironically, state neglect has accelerated the formation of self-sustaining migrant communities-like the one along Suzhou Creek. Because migrants are denied social services, they are now establishing private, unlicensed schools, businesses, and hospitals in their own neighborhoods. While the government often bans and closes these facilities, their creation demonstrates a new and independent dimension of Chinese society.

According to Mingzheng Shi, a Beijing native and scholar of urban history, the emergence of private migrant communities in post-communist China is truly revolutionary. The Chinese Communist Party knows all too well that its political power is linked to continued economic growth-and that economic growth crucially depends on cheap migrant labor. Should the migrant community choose to mobilize, Shi says, the migrants could become the single greatest threat to the future of the Shanghai stock market and the power of the one-party state.